Oracle’s AI push leads to its worst quarter since 2001

After spending a year clearly expressing its belief that AI would drive its future growth, Oracle stock is now facing its worst quarter since the dot-com bubble burst in 2001.

Oracle shares have fallen about 30% so far this quarter after peaking in September, when the company announced new data center projects related to OpenAI. The stock is now on track to experience its biggest quarterly decline in more than two decades, CNBC Ratings.

Wall Street appears increasingly skeptical that the data software maker’s expensive bet on AI will pay off in the near future, if ever. Delayed projects and weak financial results have sent its shares tumbling in recent months.

Oracle shares hit a record high in September after the company said it was under construction additional data centers as part of OpenAI’s massive Stargate project.

These new data centers, along with Stargate’s flagship site in Abilene, Texas, and other projects underway, would bring the initiative to nearly 7 gigawatts of planned capacity and more than $400 billion in investment over the next three years. Three of the new data centers are developed by Oracle

Project Stargate was first announced in January, shortly after President Donald Trump’s inauguration, during a White House press conference. The event brought together Larry Ellison, Trump allywho is executive chairman and chief technology officer of Oracle.

But earlier this month, Bloomberg reported that Oracle dilatory some of its OpenAI data center projects for at least a year due to labor and material shortages, triggering a sell-off of the company’s stock.

Additionally, investors were unimpressed with Oracle’s latest earnings report released in late November. The company reported lower-than-expected revenue while its capital expenditures increased.

During the earnings call, Oracle CFO Doug Kehring said the company plans to spend $50 billion in capital expenditures for fiscal 2026, money spent on long-term assets such as buildings, technology and equipment. That figure is about double what the company was spending a year ago. To finance these expensive projects, the company raised $18 billion in a September bond sale, a move that also significantly increased its debt load.

In October, Oracle announced ambitious plans to increase its revenue to $225 billion by fiscal 2030, from $57 billion in 2025, with much of that growth expected to come from AI infrastructure. With some projects now delayed, it remains an open question whether the company can still achieve this goal.

Meanwhile, Oracle’s core software business is already showing signs of strain. Software revenue fell 3% to $5.88 billion in the third quarter.

Still, Oracle is betting that its massive spending on AI will eventually pay off. But with projects delayed, debt rising and investors worried, that bet is starting to look a lot riskier than it did just a few months ago.